If you have been struggling with credit card debt, you may be wondering if anything can help your financial situation. Perhaps getting credit counselling has crossed your mind. Credit counselling and paying down your debt in a structured way is one of the main alternatives to bankruptcy, but it is not a fast solution, and there are some things you need to be aware of before undertaking such a step.
First of all, you might wonder whether it is worth the money, since credit counsellors and consolidators are really just middle men between you and the credit card companies. Having said that, they are more experienced at dealing with the credit card companies and negotiating favorable terms. If you are at all scared or intimidated at the idea of haggling with your credit card companies, then you might decide that the money you will have to pay for credit counselling and consolidation services will be worth it.
But before you hire anybody, you should at least attempt to negotiate with your creditors prior to hiring a third party to do it for you. There is no harm in trying, after all.
If you do not have any success, then it would be time to hire the services of a credit counselling and consolidation service. Look for a non-profit, and compare prices. Also keep in mind that a non-profit does not mean no profit, so you may find that the rates vary widely. Keep in mind also that whatever fees they charge COULD be money you would use to pay down the debt yourself in a structure way, so look at the payment plan they come up with and see if you might be able to do it better yourself.
If you are still not sure if credit counselling can help you, compared with you doing it yourself, there are a couple of other things you might want to keep in mind. The first is just how much debt you owe, and how bad things really are. If you are barely able to cover your minimum credit card payments, don’t have the daily cash flow for the essentials such as rent, utilities and food, and are really struggling from paycheck to paycheck, the credit counselling can help.
If you have fallen behind several months in your payments, they can also help.
You will also need to look at your level of debt. Some have a minimum to cover, such as at least $6,000, in order to accept you into a program.
If any or all of these situations describe where you are right now in terms of credit card debt, then there are several ways that you can find the right credit counseling program:
#1) Make sure they are accredited in your state.
This basically just states that they have the necessary credentials to deal with your case, and are approved by your state to deal with your debts. They should be part of the NFCC (National Foundation for Credit Counseling) or AICCCA (Association of Independent Consumer Credit Counseling).
The reality is that there are a lot of scammers in this industry who just take your money and are never heard from again. But you know that if a company has gone to the trouble of getting this accreditation, they will be able to help.
2-Read online reviews
There’s no better way to tell how honest a company is than to see what their current and past customers are saying about them. This is particularly necessary if it is a firm you have never heard of.
3-Look at their charges
Just make sure you avoid companies that require huge initial fees. Most legitimate firms will give you a free consultation and be clear about any and all fees. They will also offer valuable one on one credit counseling advice and offer free information through their website and through online classes, tutorials and more, so that you can not only get out of debt, but stay out of debt.
If you are looking at bankruptcy as your only option, remember that it really should be considered a last resort. It will stay on your credit record for 7 years even after it is discharged. If you are just looking for lower interest rates, call and ask. If you are looking for a structured way to pay down your debt with one single lower monthly payment and are willing to learn how to manage your money and cut up your credit cards, credit counselling may be right for you.
